Mortgage O/P v ISA top up

[IndigoBluey]

entertain me on a humid Saturday night, watching Netflix, having some wine and doing some finance thinking 🧐

Single, 42 year old:

my mortgage is £140,000, 4.5% interest rate for the next 2 years.

ISA (cash + S&S) £30,000, 3.8% interest rate.

I am really focussed on bringing down the mortgage and have been making overpayments (requesting that it reduces the mortgage term).

I know I could try and move the ISA to another provider to gain > 4% but I don’t like shifting / opening new accounts too much, I’m afraid this could impact my credit rating.

considering if it is worth transferring £5-10k from the cash ISA to my mortgage (keeping in line with annual OP threshold without penalty) just to cut out some interest?

It would still leave me with 6 months emergency fund. Or is it better to leave the money in the ISAs for compound interest and continue to O/P mortgage (current O/P £100 pm)

The mortgage just always seems on my mind. I know is isn’t big but being single makes me want it paid down a lot earlier than the term.

Watching with interest, OP.

I would use a regular savers account to get eg 7% interest on £300 a month with first direct then dump it all into the mortgage at the end. You could also open a stocks and shares ISA or a sipp and let that build up relying on the stock market and at 60 pay your mortgage off

I would overpay the mortgage keeping within any overpayment limits. I did this and paid mine off early.

Just a note to say that opening savings accounts doesn’t register on your credit report/score. Only current accounts and credit cards. You could have 100’s of savings accounts and it wouldn’t make a difference to your credit report. Hth

I'd be sticking the money in a S+S ISA with a view to longer term investment and higher reward. Then using it to pay the mortgage entirely at a natural point, e.g looking for a new fix or going on to a tracker.

@PropertyGeek525. Thanks I hadn’t realised this, helpful to know.

all good advice thanks. I am going to pay my regular overpayment into my S&S ISA so that money accumulates and then can be paid toward mortgage at some point in the future. I think the benefit of this is that the amount will be put to work with the interest. I did play around with Sprive too but found it a bit of a faff buying the vouchers whilst on my phone at the till, good for cashback though